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ADC 378 

Attachment 

 

ATTACHMENT TO ADC 378 

Revise DLMS 947I Inventory Adjustment to Identify Loss due to Destructive Test in Support 

of Navy-DLA BRAC SS&D/IMSP (Supply/Finance) (Staffed as PDC 405) 

1. ORIGINATOR: 

a. Service/Agency: Defense Logistics Agency

b. Originator: DLA J-331, 703-325-1924 (DSN 427) 

2. FUNCTIONAL AREA: Primary: Supply/Logistics; Finance 

3. REFERENCES: 

a. Functional Requirements for DLA’s implementation of the BRAC SS&D.

b. DLMSO memorandum, July 1, 2010, subject: ADC 381, Procedures and Additional Data Content 

supporting Requisitions, Requisition Alerts, and Unit of Use Requirements under Navy BRAC 

SS&D/IMSP (Supply/Finance), http://www.dla.mil/j-6/dlmso/eLibrary/Changes/approved4.asp 

c. AT&L Memorandum transmitted April 21, 2010, subject: Proposed Changes in support of Navy 

BRAC IMSP Spiral II. This memo documents ODASD(SCI) direction provided to DLA and Navy 

authorizing immediate implementation of this DLMS change

4. REQUESTED CHANGE: Significant revisions subsequent to PDC 405 staffing are highlighted. 

a. Description of Change: This change request proposes adding a new Quantity or Status Adjustment 

Reason Code ‘AP-Inventory Adjustment Decrease (Destructive Test).’ for use on DLMS 947I Inventory 

Adjustment loss (MILSTRAP DI Code D9_ functionality), to indicate that the inventory adjustment loss is 

the result of material being destroyed in test. 

b. Background: As a result of the 2005 BRAC decision, retail supply, storage and distribution 

functions and associated infrastructure supporting the Navy industrial/maintenance sites will transfer to 

DLA. The Navy sites consist of 2 Naval Shipyards (NSY) and 3 Fleet Readiness Centers (FRC). The 

intent of the directive is to significantly improve combat effectiveness while reducing costs by developing a 

world-class, cost-effective supply chain focused on readiness; taking every opportunity to eliminate waste, 

reduce touches, reduce cost, and improve readiness. 

c. Detailed Procedures: NSYs and FRCs have inspection/testing requirements that are additional to 

those used currently by DLA. This testing often requires a portion of the items to be destroyed during 

testing to determine acceptability of an item. To provide for physical and financial inventory control, the 

following applies: 

1) CURRENT DLA PROCESS FOR RECEIPT AND ACCEPTANCE. NOTE: This 

change does not alter the current DLA Distribution Standard System (DSS) process for receipt 

and acceptance of new procurement items. The inspection process addressed by this change 

involves post acceptance Navy technical inspection requirements. 

2) FRC. At the FRC sites, the material will be issued on a funded requisition and testing will 

be done after the materiel is issued to Navy. If any deficiency is found, Navy will use the Product Quality 

Deficiency Report (PQDR) process for the total quantity deficient, or potentially deficient, to report any 

problems with the material. 
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ADC 378 

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3) NSY. At NSY sites, some materiel will require technical inspection in addition to visual 

inspection at time of receipt, i.e., prior to issue to the Navy and while the material is still under DLA 

ownership. This inspection requirement will be communicated through the 527D Prepositioned Material 

Receipt (PMR) transactions to the receiving DSS co-located industrial activity (IA) depot.1

 Upon receipt, 

the DLA DSS co-located IA depot will place the quantity in SCC “J” “D” and the Navy quality assurance 

(QA) office will be contacted for the detailed inspection requirements. If through this inspection material 

is destroyed, DLA DSS co-located IA depot will process a 947I inventory adjustment loss and pass to DLA 

Enterprise Business System (EBS). The 947I Inventory Adjustment transaction will reflect the new 

Quantity or Status Adjustment Reason Code ‘AP-Inventory Adjustment Decrease (Destructive Test)’ and the 

quantity destroyed. 

(a) DLA systems will track the destroyed inventory by the 947I Quantity or Status 

Adjustment Reason Code ‘AP’. 

(b) Navy will reimburse DLA, via the MIPR process, for destroyed inventory that 

pass technical inspection on a scheduled basis (e.g., monthly, quarterly) and produce a line item report of 

inventory associated with the adjustment reason code. DLA will have the ability to provide line item 

detail for the total cost billed to Navy. 

(c) If inventory passes technical inspection, any remaining quantity associated with 

this receipt will be moved to SCC ‘A’ condition. 

(d) If inventory fails technical inspection, any remaining quantity associated with this 

receipt will be suspended allowing for litigation and contract resolution if applicable, through the PQDR 

process. Refer to DOD 4000.25-2-M, MILSTRAP, Chapters 4 (Receipt) and chapter 5 (Adjustments) for 

specific guidance on use of SCC Q (Suspended (Product Quality Deficiency)) and SCC L (Suspended 

(Litigation)). MILSTRAP/DLMS state that when inspection or technical/engineering analysis of material 

indicates that litigation action is required, the owner will direct transfer of the materiel to SCC L. 

d. Revise DLMS 947I as follows. Update to version 4030 is shown; corresponding update will be made 

to version 4010. [NOTE: For item unique identification (IUID) capability, 947I version 4030 must be 

implemented. All new implementations should use 947I version 4030.]: 

Item 

# 

Location 

Version 4030 

DS 947I Inventory Adjustment 

(Table Locations address 947I version 4030, corresponding 

changes being made to version 4010) 

Reason 

1. DLMS 

Introductory 

Notes 

Add ADC 378 to Intro note for PDCs/ADCs:

- ADC 378, Revise DLMS 947I Inventory Adjustment to 

Identify Loss due to Destructive Test in Support of Navy-DLA 

BRAC SS&D/IMSP (Supply/Finance). 

To identify DLMS changes 

included in the DS. 

2. 2/W1901/ 

0200 

Add new qualifier ‘AP’ with DLMS note:

AP Product/Formula Evaluation and Testing 

DLMS Note: 

Inventory Adjustment Decrease (Destructive Test). Loss from 

destructive test, single adjustment. Authorized DLMS 

enhancement for DLA industrial activity support agreement

only; see introductory DLMS note 4e. Refer to ADC 378. 

To accommodate NavyDLA BRAC SS&D/IMSP 

requirement to identify an 

inventory adjustment loss 

that is the result of 

destructive test. 

 

1 ADC 381 (reference 3b) adds an ‘Inspection Parameters Code’ to several DLMS Supplements (DS) to include DS 527D. 
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ADC 378 

Att 

 e. Revise the table for ‘Correlation of MILSTRAP DI Code Functionality to DLMS Supplements 

(DS)’ (DS Sequence) to add code ‘AP’ as shown below (change is identified by red bold italics). Table 

is available at: http://www.dla.mil/j-6/dlmso/eApplications/LogDataAdmin/dlssdlmscrossreftable.asp. 

DS # DLMS Supplement Title DI Code(s) DS Accredited Standards Committee (ASC) X12

Functional Equivalent to MILSTRAP DI Code 

 Beginning Segment Additional Information needed 

947I Inventory Adjustments D8_, D9_ 1/W1505/0200 

Transaction Type 

Code NU – Inventory 

Adjustment 

For Increase (D8_) use 

2/W1916/0200 Inventory Transaction 

Type Code AJ -Inventory 

Adjustment Increase 

For Decrease (D9_) use 

2/W1916/0200 Inventory Transaction 

Type Code AD-Inventory 

Adjustment Decrease 

2/W1901/0200 “Quantity or Status 

Adjustment Reason Code” = 

equivalent to 3rd position DI Code:

3rd Pos W1901 Code

D8A or D9A AA 

D8B or D9B AB

D8C or D9C AC 

D8D or D9D AD 

D8E or D9E AK 

D8F or D9F AL 

D9G only AJ 

D9H only AI 

D8J or D9J AE

D8K or D9K AF or AN 

D8S or D9S AG

D8Z or D9Z AH 

-----NA----- AP

5. DEFENSE AUOTMATIC ADDRESSNG SYSTEM (DAAS) Mapping: Update DAAS to allow 

new data to pass any applicable edits. 

6. ALTERNATIVES: None identified. 

7. REASON FOR CHANGE: DLA requires ability to identify inventory losses as the result of 

destructive testing to provide line item detail as well as total cost to the NSY on a scheduled basis. 

This code will be used by the DLA DSS co-located IA depot at the BRAC NSY sites. The BRAC 

FRC sites, having much shorter product production times than NSYs, must where possible bill an 

actual customer directly, obtaining and applying defective credits as they occur and avoiding increased 

indirect rates shared across all fleet customers. 

8. ADVANTAGES AND DISADVANTAGES: 

 a. Advantages: Enable DLA to have visibility of all material destroyed during destructive testing 

as the result of Navy requirements and receive reimbursement from the Navy via the MIPR process 

accordingly. 

b. Disadvantages: None identified. 
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ADC 378 

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9. ESTIMATED TIME LINE/IMPLEMENTATION TARGET: Target implementation was Dec 

2010. 

10. IMPACT: 

a. Publications. Requires update to DLMS 947I and DLMS Data Dictionary Quantity or Status 

Adjustment Reason Code to add new code value.

b. Automated Information Systems (AIS): DLA EBS, DLA DSS, and applicable Navy systems must 

recognize/process a new code value. 

c. DLMS Data Elements: No DLMS data elements are being added by this change. This change 

proposes revision of the DLMS use of ASC X12 data element ID 181 (Quantity or Status Adjustment 

Reason Code), to authorize use of existing ASC X12 value ‘AP’ in DLMS 947I W1901. 

11. PDC 405 COMMENTS AND RESPONSES are at the enclosure. 
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ADC 378 

Enclosure 

 

ENCLOSURE TO ADC 378 

Revise DLMS 947I Inventory Adjustment to Identify Loss due to Destructive Test in Support 

of Navy-DLA BRAC SS&D/IMSP (Supply/Finance) (Staffed as PDC 405) 

PDC 405 COMMENTS AND RESPONSES: 

# COMPONENT COMMENT RESPONSE 

1 DLA Concur. Noted. 

2 USN Concurs as written and submits no additional 

changes or amendments. 

Noted. 

3 USAF Concurs without comment. Noted. 

4 USMC Concur without comment Noted. 

5 DFAS 

Columbus 

I see where the charges are going to be 

collected via MIPR. Is there a reason for this 

vice using the Interfund Billing System? 

--------------------- 

Based on that input this will have minimal 

impact to A/R right? 

DLA J-89 RESPONSE: 

Being done via MIPR because volume is low, dollars 

are low (less than $100K as I recall) and there won't 

be a MILS document with the agreed upon 

reimbursement amount. When to reimburse and how 

much to reimburse will be a manual process. 

----------------- 

Yes. 

6 Contractor 

support to UID 

Program Office 

and BTA 

WAWF 

Program 

(J Craig) 

I believe the material covered by the PDC might 

cover both items with UIIs and items without 

UIIs--however I am not sure about the without 

UIIs if the items are such that they require 

destructive testing and thereby probably some 

item control by the each or within lot/batch at a 

minimum. I believe some items in this 

destructive test scenario may actually be 

equipment items such as a weapon or munitions 

lot--but I am not sure.

DLA J33 IMSP Team Lead (A.Spry) 

RESPONSE: These are items are consumable 

items. DLA will not be purchasing equipment, 

weapons or munitions for NSY sites. 

 

7 Contractor 

support to UID 

Program Office 

and BTA 

WAWF 

Program 

(J Craig) 

11/5/2010 

comment

RE: RESPONSE at row 6 above: 

Some of these items will be spares/reparables, 

etc and while “consumables” will still be 

IUID-relevant. While this ADC does not 

address any updates to the IUID Registry for 

IUID items, we assume that will be covered in 

a later ADC to be developed following the 

workshops on IUID in the Supply Chain.

DLA Logistics Management Standards Office 

Response: PDCs/ADCs developed as a result of 

the SCI Logistics IUID Workshops held in 2010-

2011, will focus on requirements for conveying 

IUID in DLMS transactions/business processes 

(e.g., inventory, receipt, shipment status). The 

focus will not be the IUID Registry. A separate 

PDC/ADC to address IUID registry requirements 

may be necessary. The proponent for the IUID 

Registry may want to leverage the ADCs that 

result from the IUID Workshops to identify 

which DLMS transactions the IUID registry 

requires, if they envision using DLMS 

transactions for that purpose; and to develop a 

PDC to address those requirement to include, 

but not limited to, what transactions the 

registry requires and does the registry want 

DAAS to provide the images, criteria for when 

to provide images, etc.
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ADC 378 

Encl 

# COMPONENT COMMENT RESPONSE 

8 Contractor 

support to UID 

Program Office 

and BTA 

WAWF 

Program 

(JCraig)

I assume before the material in this scenario is 

transferred from DLA to Navy for testing, 

that the material will be accepted by DLA and 

WAWF updated--is this correct? Or is this 

testing in support of Inspection and 

Acceptance of new material? 

I ask because I am trying to determine the 

possible impacts on WAWF and the IUID 

Registry/GFP Hub. 

If all the material will be accepted prior to 

issue to Navy for testing, then the IUIDrelevant material will be included in the 

Registry. 

DLA J33 IMSP Team Lead (A.Spry): When 

material requires inspection at the Shipyard the 

material will be receipted directly into condition 

code ‘D’ prior to inspection or acceptance. 

JIM CRAIG COMMENT 11/5/2010: Not sure if 

this answers how WAWF will be updated—see 

comments to 4c1 and 3 [this table rows 11 and 13 

below]. 

DLA Logistics Management Standards 

Office: Our understanding, based on post-CDR 

IMSP Team meetings, is that when the Navy 

QA inspection criteria is not a contractual 

requirement, then the materiel will be receipted 

in SCC D to EBS and acceptance sent to 

WAWF based on the normal DSS 

receipt/acceptance process criteria. 

Subsequently, the materiel will undergo the 

Navy QA inspection process and will be 

947I/DAC to SCC A, L, Q or K as appropriate. 

9 Logistics Mgt 

Stds Office 

(E Hilert) 

ELLEN HILERT: Annette, in addition, the 

question from Jim Craig, DPAP 

WAWF/IUID contractor support specifically 

asked if testing was in support of Inspection 

and Acceptance of new materiel... 

I believe that the DLA response needs to 

clarify the process to separate how it would 

work for: 

(1) Navy QA inspection requirement (which 

we understand to be performed after 

acceptance while materiel is in SCC D) 

(2) Contract-required destination 

inspection/acceptance (which we understand 

would require inspection prior to acceptance 

- not sure if this scenario was spelled out in recent 

discussions - assuming there could be a 

combination of both contract-required inspection 

for acceptance followed by QA inspection)

DLA J33 (A. Spry): I attempted to document 

current process for destination acceptance [page 

1, paragraph 4.c.1.a.]. This will not change at 

the BRAC SS&D sites, the material will be put 

in SCC ‘L’ as it is done today. When litigation 

is resolved DSS will generate a DAC to move 

material from SCC L to applicable condition 

code. Or it may be returned to the vendor for 

replacement, etc.

10 Contractor 

support to UID 

Program Office 

and BTA 

WAWF 

Program 

(J Craig)

This PDC includes a comment about using the 

4030 947 in order to be able to include the 

UIIs; however, there is no guidance in this 

PDC about updating the registry for the 

"tested and possibly destroyed property"--

should this guidance be included in this PDC? 

Or is there a PDC to cover this process? 

DLA Logistics Management Standards Office: 

This change does not address IUID registry 

requirements. Further, no requirement to update 

the IUID registry with 947I transaction has been 

identified. Such a requirement would need to be 

submitted to the DLA Log Mgmt Stds Office as a 

separate PDC. 

The comment on 947I version 4030 is standard 

language for any PDC related to 947I to alert that 
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ADC 378 

Encl 

# COMPONENT COMMENT RESPONSE 

IUID capability is ONLY available in 947I 

version 4030, and to advise that any new system 

implementations should use version 4030, not 

version 4010. Systems that previously 

implemented 947I version 4010 must migrate to 

version 4030 to implement IUID.

11 Contractor 

support to UID 

Office and 

BTA WAWF 

Program 

(J Craig) 

11/5/2010 

RE: Page 1, Para 4.c.1): “Current DLA 

process: When material requires visual 

inspection upon receipt based on contractual 

agreements current process will be used to 

place material in Supply Condition Code 

(SCC) ‘L’. Upon acceptance DSS will 

process a DLMS, 947I/DAC transaction 

moving material.”

COMMENT: What will DSS send to 

WAWF? And when? At this point WAWF 

can ONLY accept one response from DSS per 

item—cannot initially report as “L” and later 

change to “accepted.” If the 

inspection/testing is going to be done before a 

decision on acceptance or rejection of the 

items, then DSS must NOT send anything to 

WAWF until final decision is made. We must 

remember that the Vendor’s payment is 

impacted awaiting acceptance. 

DLA Response (J.Weiner/DLAJ6N/email

11/5/2010): All WAWF requirements as well 

as IUID requirements are non issues. The 

current process is what DLA does today, the 

other WAWF comments are what we designed 

to do to allow this process to work, and was 

approved. The IUID functionality in DSS will 

not change from what we do today.

12 Contractor 

support to UID 

Office and 

BTA WAWF 

Program 

(J Craig) 

11/5/2010 

RE: Page 1, Para 4.c.2): “FRC. At the FRC sites 

the material will be issued on a funded requisition 

and testing will be done after the materiel is issued 

to Navy. If any deficiency is found, Navy will use 

the Product Quality Deficiency Report (PQDR) 

process for the total quantity deficient, or 

potentially deficient, to report any problems with 

the material.” COMMENT: I assume this 

means that the property will first be accepted 

into DSS and WAWF updated accordingly 

and allow the vendor to be paid. Then the 

property will be issued to the FRC for testing. 

If yes, then this is OK. 

The materiel will be receipted in SCC D to EBS 

and acceptance sent to WAWF based on the 

normal DSS receipt/acceptance process criteria. 

Subsequently, the materiel will undergo the 

Navy QA inspection process and an Inventory 

Adjustment-Dual SCC Change (947I/DAC) will 

be processed to change the appropriate SCC 

(e.g., SCC A, Q, etc.). 

A.Spry - 3/8/2011 – concur with the above 

receipt process

13 Contractor 

support to UID 

Office and 

BTA WAWF 

Program 

(J Craig) 

11/5/2010 

RE: Page 2, Para 4.c.3), 1st sentence: 

“NSY. At NSY sites material will be inspected at 

time of receipt, i.e., prior to issue to the Navy and 

while the material is still under DLA ownership.” 

COMMENT: Does the statement “DLA 

ownership” mean DSS will report acceptance 

back to WAWF prior to inspection? If yes, then 

this is OK. If not, then the comments in 1) 

above apply here as well.

Yes – DSS would report this to WAWF when 

receipted into condition code ‘D’ – also allows 

EBS to pay vendor as applicable. 

A.Spry - 3/8/2011